Blender 2.74 loop tools make circle disappear
Your object has a pretty extreme object scale on it. To get an idea of how extreme, this is what it would look like without it:



If you apply the scale to the mesh with &#9096; CtrlA it then works as expected:



See Why are the longer edges being beveled more? for some more detail. Suffice it to say that loop tools sees the mesh without the object scale, and that tall thin hole is confusing it.